New York-based Fenway Partners hopes to restructure its Fund II and Fund III, according to three sources with knowledge of the deal.
The US mid-market firm closed Fund II on $1 billion in 1998 and Fund III on $700 million in 2006; the remaining net asset value of the two funds combined is approximately $300 million, according to one of the sources.
Moelis & Co, which is advising the process, declined to comment, while Fenway could not be reached for comment at press time.
Fenway’s funds together have seven unrealised investments, according to its website. These include yearbook producer American Achievement, sports equipment designer Easton Bell and logistics provider RoadLink. The firm has 21 prior investments.
One source noted that any restructuring deal was expected to include a carry reset on Fund III, which was returning a 0.9x multiple and a 2.3 percent internal rate of return as of 30 September 2013, according to documents from the Oregon Public Employees Retirement System (OPERS). OPERS invested $50 million in Fund III, a follow-on from its $50 million invested in Fund II. Fund II was returning a 1.27x multiple and 5.6 percent IRR as of 30 September 2013.
Other LPs in Fund II include the California Public Employees’ Retirement System (CalPERS), Rhode Island State Treasury, HarbourVest Partners and Lexington Partners, while LPs in Fund III include the New Mexico State Investment Council and the New York City Police Pension Fund.
Founded in 1994, Fenway invests in businesses with enterprise values of $100 million to $600 million, with a strong focus in two sectors: consumer branded products and transportation/logistics/distribution.